4
According to data published by GFK-Russia (a subsidiary company of the German GFK-Group), the size of the combined consumer electronics and household appliances markets in Russia was $40.6 .
U.S. Commercial Service
30 December 2011
Consumer Electronics Market

Overview
The Russian consumer electronics market includes telephones, MP3 players, home and automotive audio/video equipment, personal computers, TV sets, calculators, GPS automotive navigation systems, home security and automation products, products for playback and recording of digital video and audio media, digital cameras and camcorders, and other products for entertainment and communications.
Before the recent economic crisis, the consumer electronics market was one of Russia’s most developed and most competitive retail sectors. According to data published by GFK-Russia (a subsidiary company of the German GFK-Group), the size of the combined consumer electronics and household appliances markets in Russia was $40.6 billion in 2008.
In 2009, Russia’s consumer electronics market drastically declined. Industry experts evaluated market at $18.5 billion (a 35% decrease compared to 2008). However, starting in the 2nd quarter of 2010 the consumer electronics market started to grow and it reached $21,500 billion by the end of the year. In 2011 the market showed strong signs of recovery with annual growth of 30%. If 2012 shows the same high growth rates, the Russian Consumer Electronics market has all chances to come closer to before-crisis figures of 2008.
In 2011, sale growth in the audio/video industry subsector was mostly generated by the demand on flat panel TVs, including Full HD, LED, 3D, and Slimline models; car audio; and home theaters. The most demanded products in the IT subsector were mobile computers, including notebooks, netbooks, and tablet PCs. The market for telecom products was mostly driven by sales of mobile smart phones with touch-screen technology and applications and services for mobile phones. The digital photo market continued recovery mostly because of increased sales of compact digital cameras providing higher resolution and advanced features, such as HD video, at an affordable price. The market for office equipment continued to recover, but did not show high growth rates.
Accurate figures for the consumer electronics market in Russia are difficult to determine due to a large number of so-called “grey market products” imported into the market. However, with the growth of the largest retail chains, whose market share will increase, a corresponding decrease in “grey market” goods is expected.

Imports
The major portion of the consumer electronics market is occupied by products imported from Asia, Europe, and the United States. All major global brands are represented in Russia and have wide recognition. The U.S. consumer electronics share of the Russian market is mostly represented by IT products, high-end audio products, automotive audio and navigation products, home security and automation products, and mobile phones.

Domestic production
Local production is mostly represented by a large number of small and medium sized Russian IT companies, and several telecom manufacturers.
An example of foreign investment in the domestic IT industry is a $50 million HP and Foxconn joint venture, which started production of HP desktop computers in St. Petersburg in April 2010.
A $700 million project for production of “Plastic Logic 100 for Education,” an electronic textbook designed specifically for the Russian education sector, is jointly developed by
Russian State Nanotechnology Corporation ROSNANO and British Plastic Logic company.
According to Plastic Logic, a factory for the manufacture of next-generation screens and devices is currently being built in Zelenograd, on the outskirts of Moscow, and, when complete, it will be the largest factory in the world for plastic electronics.
Other local manufacturers include ODMs (original design manufacturers) providing EMS (electronics manufacturing services) for contract manufacturing of CRT, PDP, and LCD TVs, as well as DVD players under the Sony, Panasonic, Akai and other well-known marks.

Distribution
Consumer electronics products are imported and distributed in Russia by many distributors. All major international brands have their representative offices or authorized distributors as well. About 50% of consumer electronics marketed in Russia are sold by several of the largest retail chains that have hypermarkets and stores located in Moscow, St. Petersburg and other large cities. Another 25% are sold by regional chains, while the rest is sold by small retail companies and through the Internet. However, recently the share of products sold through the Internet significantly increased. According to Citibank Russia analytical department, the volume of products sold through Russian Internet in 2012 will increase by 33% and will reach $27 billion.